Well, in that case you can say "We call him Milo because they're both family names and we don't want to confuse people with two Michaels or Roberts."

What about nn Miro? It sounds more Japanese than anything else but it's the first two letters of Michael and Robert, less of a stretch than Milo. Or nn Cole from Michael, though how well this one works probably depends on your accent.

I agree that nicknames don't have to make "sense", my daughter's name is Aspen and most of us call her 'Happy'. When she was a baby, our DS couldn't say her name (he was 14 months old), so he called her 'Appy' and it soon after changed to happy. She is the most easy-going, laid-back, content, and "happy" little girl, that it fits so well! Who would've thought?! Sometimes a nickname reflects personality and you don't find that out until after they are born. BTW- a dear friend of ours that passed away was named MichaelRobert, so that name has a special name in my heart.